Budget 2021: Key takeaways

Finance minister Nirmala Sitharaman tabled the Union Budget in Parliament today. Healthcare was a key focus, as was infrastructure. These are the key highlights of the Budget:

Healthcare

1) Outlay of ₹64,180 crore over six years.

2) Setting up of Integrated Public Health Labs.

3) Expanding integrated health information portal.

4) ₹35,000 crore for Covid-19 vaccine in 2021-22.

5) National Institution for One Health.

6) 4 regional National Institutes for Virology.

7) 15 Health Emergency Operation Centers and 2 mobile hospitals.

8) Integrated public health labs in all districts and 3382 block public health units in 11 states.

9) 17 new Public Health Units and strengthening of 33 existing Public Health Units.

10) Regional Research Platform for WHO South-East Asia Region

Industry

1) PLI launched to create manufacturing global champions across 13 sectors with an amount of nearly ₹1.97 lakh crore committed in the next five years, starting FY2021-22.

2) MITRA Scheme to create world class infrastructure for global champions in textile sector leading to creation of seven textile parks over 3 years.

3) Voluntary vehicle scrapping policy to phase out old and unfit vehicles.

4) Fitness tests in automated fitness centres. After 20 years in case of personal vehicles, after 15 years in case of commercial vehicles.

Infrastructure

1) National Rail Plan: Aims at developing adequate rail infrastructure by 2030 to cater to the projected traffic requirements up to 2050. The objective is to increase the modal share of rail in freight from the current level of 27% to 45%.

2) Development Financial Institution with ₹27,000 crore capital to be established.

3) National Infrastructure Pipeline (NIP) expanded to 7,400 projects:

Measures in three thrust areas to increase funding for NIP:

Creation of institutional structures

Big thrust on monetizing assets

Enhancing the share of capital expenditure

4) Rs. 20,000 crore to set up and capitalise a Development Financial Institution(DFI) – to act as a provider, enabler and catalyst for infrastructure financing.

5) Rs. 5 lakh crore lending portfolio to be created under the proposed DFI in 3 years.

6) Debt Financing by Foreign Portfolio Investors to be enabled by amending InvITs’ and REITs’ legislations.

Financial Reforms

1) Rationalised single Securities Markets Code by 2022.

2)World class fintech hub at GIFT IFSC.

3) Permanent institutional framework for corporate bond market.

4) SEBI as regulator and greater role for WDRA for development of commodity market ecosystem.

5) Investor charter as a right across all financial products.

6) Amending the Insurance Act,1938, to increase the FDI limit with safeguards.

7) Asset Reconstruction Company Limited and Asset Management Company to resolve stressed assets problem of PSBs.

8) Fiscal deficit for FY22 estimated at 6.8%. Fiscal deficit estimated at 9.5% of GDP for 2020-21.

9) Insurance Act to be amended to increase FDI limit to 74 per cent from 49%.

10) Rs. 5.54 lakh crore capital expenditure in BE 2021-22—sharp increase of 34.5% over Rs. 4.12 lakh crore allocated in BE 2020-21.

11) Setting up a system of Regulated Gold Exchanges: SEBI to be notified as a regulator and Warehousing Development and Regulatory Authority to be strengthened.

12) Capital infusion of Rs. 1,000 crore to Solar Energy Corporation of India and Rs. 1,500 crore to Indian Renewable Energy Development Agency.

13) Strengthening NCLT framework.

14) Introduction of alternate methods of debt resolution and special framework for MSMEs.

15) Rs. 1,75,000 crore estimated receipts from disinvestment in BE 2020-21.

16) Strategic disinvestment of BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML, Pawan Hans, Neelachal Ispat Nigam limited etc. to be completed in 2021-22. Other than IDBI Bank, two Public Sector Banks and one General Insurance company to be privatized

17) IPO of LIC in 2021-22

Tax proposals

1) Exemption from filing income tax returns for senior citizens (75 years and above) who only have pension and interest income. The paying bank will deduct the necessary tax on their income.

2) Reducing time limit for reopening of income tax assessment.

3) Constitution of a Dispute Resolution Committee for small tax payers.

4) Additional deduction of ₹1.5 lakh shall be available for loans taken up till 31 March 2022 for purchase of affordable house.

5) Rationalisation of customs duty structure by eliminating outdated exemptions.

6) Support to MSMEs hit by recent sharp rise in iron and steel prices and relief to metal recyclers

7) Rationalisation of duties on raw material inputs to man made textile.

8) Rationalisation of custom duty on gold and silver.

9) Increase in duty on solar invertors and lanterns to promote domestic production.

10) Agriculture Infrastructure and Development Cess on small number of items.